This has got to be the most sit-up-and-take-notice quote that has come of out of the World Economic Forum going on at Davos, Switzerland so far.
According to media reports, Harvard professor and noted economist Kenneth Rogoff said the launch of the euro was a “giant historic mistake, done to soon” that now requires a certain level of fiscal union and a common bank resolution fund to make it work. However, the 18-currency bloc’s leaders are still struggling to accomplish both tasks.
Still, having made that ‘historic mistake’, the eurozone seems to have fended off the threat of a break-up. “No one is talking about the eurozone falling apart. I don’t think it’s a small political achievement…I think Europe deserves credit for that,” he said.
While there are several media stories highlighting Rogoff’s remark, I recommend the UK’s The Telegraph newspaper’s online report for a nice roundup of his comments.
In other interesting comment, the head of head of French energy giant Total,Christophe de Margerie, said that given Europe’s ongoing economic problems, it could no longer be called “developed”.
“Don’t take it as being provocative (but) I think Europe should be reclassified as an emerging country,” he said, according to an AFP report. The continent needs to start from scratch in terms of economic policy to overcome the twin evils of high unemployment and stagnant growth, he said, according to the report.
Two comments that basically suggest Europe — and the euro — is still in a mess. And that’s there’s a lot of work to do before any recovery becomes sustainable.